Iowa Investment Fraud Attorneys
Wealth has always attracted fraudsters, which is why Iowa investors from the wealthier suburbs of West Des Moines and University Heights near Cedar Rapids should be vigilant in watching their investment accounts. Malecki Law is a national investment recovery law firm that represents investors across the nation, bringing lawsuits for financial fraud or negligence against some of the largest financial firms who failed to properly supervise customer accounts. Malecki Law’s investment fraud attorneys are well versed with the securities laws and have recovered tens of millions of dollars on behalf of investors and retirees of all backgrounds.
Seniors are often the most targeted group of investors because they are more isolated and tend to rely on others to manage their money. Malecki Law’s founder, Jenice L. Malecki, Esq. has recovered tens of millions of dollars for senior investors and retirees, and is a passionate advocate for serving the underrepresented, especially elderly victims of financial abuse. This is an area that has received consistent scrutiny by federal regulators such as the Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC), as well as state regulators like the Iowa Insurance Division, which also has statutory authority over the sale of securities and other regulated products within the state.
In many of the lawsuits our investment fraud lawyers bring to trial on behalf of senior investors, insurance products like variable annuities, as well as alternative investments like non-traded REITs and leveraged ETFs, somehow end up in the retirement accounts of senior investors who have little understanding of what they are. Apart from the exorbitant fees and commissions associated with these products, brokers who recommend these products often have little understanding of what they are selling. This is why, for example, the Iowa regulator has fined financial firms like LPL Financial for failing to supervise the sale of non-traded REITS in customer accounts, sold in excess of the state’s concentration limits, the standards within a particular prospectus for a REIT, and in violation of LPL’s own investment policies and procedures. It is thus important to hire a broker fraud law firm that is familiar with these products, as well as the supervisory responsibilities of the firms that sell them.
A real estate investment trust, or REIT, is a legal entity owning income-producing real estate, such as office buildings, shopping malls, hotels, and apartments. A publicly traded REIT lists its shares on a securities exchange and the market establishes a fair value for the shares. In contrast, a non-traded REIT is opaque because it does not list its shares on any exchange and the true value of its shares may be obscured or misstated. Regulators have identified many investor protection concerns with non-traded REITs. Non-traded REITs pay abnormally high commissions and 10 to 15% (6-7% to the brokers) of investor assets may be immediately diverted to pay commissions, fees, and expenses. Dividends are not guaranteed because the distributions may be funded entirely or in part by new investor cash or borrowed funds – leveraged money that can place the REIT at greater risk of default and devaluation, including loss of the entire principal investment. Because non-traded REIT shares do not trade on national securities exchanges, they cannot be easily priced or sold. Unsophisticated investors have often been startled to discover that few willing buyers will purchase their shares. The Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA) have not surprisingly issued numerous investor alerts warning about non-traded REITS. See, for example, FINRA Investor Alert, Public Non-Traded REITS - Perform a Careful Review Before Investing (2012).
If you have suffered investment losses in your retirement account and believe you have been sold non-traded REITs or other alternative investment products without proper disclosures of the risks, then you should contact the investment fraud attorneys at Malecki Law for a free initial consultation. Many of our customers choose a contingency arrangement instead of being billed hourly, meaning we do not get paid unless we make a financial recovery for you first.